HAL Share Price Rises on Improved Execution and Easing Supply Constraints

HAL's share price rose 1.11% to Rs 4,853.80 after Citi and Goldman Sachs retained their Buy ratings on the defense major, citing improving execution and easing supply constraints as key drivers of their continued optimism.

Citi has kept its target price at Rs 6,175, implying an upside of roughly 27% from current levels, while Goldman Sachs has set a target of Rs 5,870. CLSA has maintained an Accumulate rating with a target of Rs 5,481, spanning a target range that implies upside of between roughly 13 and 27%.

The central thesis across all three brokerage notes centers on HAL's historically largest execution bottleneck: the supply of GE F404 engines used in its Tejas Light Combat Aircraft programme. With engine deliveries resuming and a recent contract signed for an additional 113 F404-GE-IN20 engines, brokerages see this constraint easing meaningfully, which directly de-risks the company's revenue trajectory for the next two fiscal years.

HAL's order backlog has been estimated at between roughly Rs 2.3 trillion and Rs 2.5 trillion by various brokerages, representing several times the company's annual sales and giving it multi-year revenue visibility, provided execution keeps pace with the order intake.